Trade deficit looms for Vietnam despite positive start to 2016

The country will run a trade deficit this year but the figure will be less than five percent of total export revenue, said the Ministry of Industry and Trade in a teleconference on June 6.

Vu Ba Phu, general director of the Department of Planning under the ministry, explained that the free trade agreements Vietnam has joined will draw many foreign-invested projects, boosting demand for imported machinery and equipment.

Data from the department also showed that Vietnam saw a trade surplus of $1.36 billion over the first five months of the year, with export value recorded at $67.7 billion, surpassing import value at $66.3 billion.

While state-owned enterprises recorded a trade deficit of $7.74 billion in the first five months, companies with foreign invested capital posted a trade surplus of $9.1 billion.

China remained the biggest supplier of Vietnam’s imports with a turnover of $19.2 billion, down 2.9 percent on-year, followed by Japan at $5.7 billion, down 6.4 percent.